Before you decide to close your bank account because of continuous debits from the payday loan companies, speak with your bank manager and know the policies regarding ACH transactions after the account is closed. Some banks do have the policy regarding ACH transaction that allows them to force open a closed account and allow the debit from any payday loan company if it’s done within a certain time frame after the account is closed. If your bank has such policy and can force open your closed account, you might end up owing a legal $1,000 bank charge and being reported to the chexsystem. You might have averted the whole mess by owing barely legal (or not at all legal) payday loan companies. The best thing to do is to go and meet with the branch manager in person and know about the ACH transactions after an account is closed.

Just in case, if you are dealing with a bank that has such policies, explain your situation to them. Don’t feel embarrassed. Show the letters sent to the payday loan companies revoking their rights to debit money out of your account. The best option will be to put your account on deposit only, an ach block, or on a hard hold before the account is actually closed in the final stage. Your bank can do one of these things. Don’t take their “no” as an answer. The good thing will be that any payday loan company trying to debit money out of your account won’t get through.

Closing an account is the best solution when you are dealing with so many illegal payday loan sharks on the internet. Leaving the account open gives them the chance to withdraw funds from your account. They go with different names, so blocking them won’t help because they will try to debit using a different amount. They might produce paper checks and run them through your account.

According to some state laws, a borrower can be prosecuted if you have defaulted on your payments and have closed the bank account. But that happens only if it can be proven that you have actually been committing some fraudulent activities. The best thing will be to check with your state attorney general’s office and the state banking commissioner’s office and know about the laws. You want to make sure that you are doing the right thing instead of creating more problems.

 

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This entry was posted on Friday, December 14th, 2007 at 6:39 am and is filed under Loan, Payday Loan. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

7 Comments

  1. February 15, 2008 @ 6:42 am


    This is a article very well presented by you.This is a real time experience from which I learned a lot. I will wait for your future suggestions.

    Posted by chex system
  2. February 15, 2008 @ 9:09 pm


    Good advice…illegal practices in pay day loans is a big problem and people should definitely be educated on this topic

    Posted by Jack McManus
  3. June 20, 2008 @ 1:15 pm


    This article is helpful, however, it should be stressed that in almost every instance where one takes out a payday loan, you sign a legal and binding contract that for the duration of the loan, you WILL NOT close your account. By doing this, you would be engaging in the same deceptive practices that these payday loan companies participate in.
    The harrassment, threats and futile effort to honor your debt becomes almost impossible once you close your own account prior to settling your obligation. I know this first hand, because my own bank closed my account with no more than one days notice they were doing so, for reasons that are still unclear. I had no time to cancel my payroll direct deposit and all my pending ACH payments, one of which was a payday loan company. Ultimately, I opened a new checking account and supplied the payday loan company with my updated banking information – but since I had missed ONE scheduled payment, they demanded payment in full. It has been a battle to set myself square with everyone.
    Yes, closing your account is always an option, but you are right when you indicate check your local laws and READ the consent that you gave. Payday loan companies pray on us and extort us, however, we keep using them, so we allow it — at the end of the day.

    Posted by N Pantera
  4. May 8, 2009 @ 10:37 pm


    I got took by a payday loan company calling themselves “Payday loans of funding” or Payday loans of debit” I cannot locate their contact information and they are bleeding my checking account. Finally I took all the money out and opened another account. NOT! I’m incurring NSF fees. Today they tried to send a ACH debit through twice! Twice in one day. That has to be illegal. The bank cannot locate them and I cannot locate them and the bank will not stop the ACH debits. I finally resorted to going through an organization to help me with the bank. Now, I have to locate these loan sharks who are taking me to the cleaners. I will NEVER do this again. Anyone out there that is thinking about it, make sure you know that they have something called automatic renewal…I was a virgin with this and got TOOK.

    Posted by LaShaun
  5. December 8, 2010 @ 1:12 am


    I took out serveral payday loans trying to make ends meet because i have bad credit so i can not get a loan from a bank so i am robing peter to pay paul sort of speak and those encrements over and over again you have paid those payday loan places tripple than what you borrowerd.

    Posted by Deloris
  6. August 26, 2011 @ 7:50 am


    I wouls like to know if benetol can be ause by patients hear defibulatos and pacemakes. I had my arorta replaced back in 2005 and I am gaining weight..Will this drug help? I can submit a list of the medications that I currently take; if there is a possiblity that this drug colld help.

    Posted by Julieta Pavloski
  7. October 2, 2014 @ 2:04 pm


    This forums may be helpful: forums.debtcc.com

    Posted by financen